ESG: Compliance or Competitive Edge?

25 Oct 2024 | Gamuda Berhad

[L-R] Justin Chin Jing Ho (Managing Director of Gamuda Engineering), Ir. Dr. Sanjayan Velautham (Chief Operating Officer of the Energy Commission of Malaysia), Badrul Hisham bin Ibrahim (Senior General Manager of Engineering, Group Technical Solutions, Project Delivery and Technology at PETRONAS) and moderator Kamarul Bahrin Haron (award-winning veteran journalist, editor and TV anchor).

The Twelfth Malaysia Plan (12MP) details how industry players are required to ramp up environmental, social and governance (ESG) and Sustainable Development Goals (SDGs) in their business practices. Sounds great in principle, but how do we balance growth and ESG targets?

As ESG becomes increasingly important to stakeholders and investors, outputs can become an advantage by showing them how the company makes decisions and creates value.

All it takes is a mindset shift.

Justin Chin Jing Ho, Managing Director of Gamuda Engineering spoke about this shift within the group during his panel session, Engineering a Sustainable Future: The Current State and Future Potential Through ESG Integration at the Kuala Lumpur Engineering Forum.

“When we established the Gamuda Green Plan 2025, we wanted to explore how we could be more sustainable especially via digitalisation. We take a data-driven approach to ESG because data is very crucial in tracking, measuring and reporting on our ESG progress,” said Chin.

Ong Jee Lian, Group Chief Communications and ESG Officer concurs. During her panel session on Addressing ESG targets in STEM (science, technology, engineering, and mathematics) through Diversity, organised by the Women Engineers Section of the Institution of Engineers Malaysia, she emphasised that knowing one’s ESG impact is not just a nice-to-have but a requirement.

[Right] The panel involved Ir. Ts. Dr. Khor Jeen Ghee (IEM Penang Branch STEM sub-committee lead), Dr. Eu Poh Leng (Director of External Package Innovation, NXP Semiconductors), Ong Jee Lian, and Ts. Hooi E-Wen (Head of Operations Support at Eftech Energy Solutions). [Left] Panellists receiving their tokens of appreciations on stage.

“ESG gives companies a competitive leverage. Disclosing ESG outcomes gives investors visibility on their investment that is fast becoming an imperative weightage in their decision-making?” said Ong.

That’s where STEM comes in.

Gamuda’s own engineers accelerated tech innovations within the company. “The deal was if we could demonstrate innovation and make them viable, then we could do what we have set forth to do,” recalled Chin. And Gamuda delivered.

The Gamuda Digital Operating System (GDOS) [one brainchild of this ongoing exercise] unifies the Group’s enterprise data, enabling multidisciplinary and regional collaboration and information sharing on a single platform. This includes ESG-related data that helps us track our Gamuda Green Plan 2025 targets.

With an ESG framework that focuses on the Social Impact and driven by evidence-based approach, Gamuda uses the Social Return on Investment (SROI) to validate its social efforts and investments. “Our overall SROI score is 3.4, meaning that every RM1 invested generates a return of RM3.40,” explained Ong.

Based on Gamuda’s SROI study from 2015 to 2022, we have generated a social impact value of RM534.2 million.

Gamuda’s engineers have since developed breakthrough solutions that overcome sustainability challenges in construction. Its Next-Generation Digital Industrial Building System cuts down on raw materials and processes including wastage, hence saving cost and time.

Realising they were on to something, the engineers got organised. The team is now 150-strong, comprising AI and Cloud specialists and architects, with a yearly key performance indicator to dream and innovate.

“With increased implementation of digital construction, we can work in a way that was unimaginable just 10 years ago. We increase efficiency at the construction site, we reduce safety risk and we create more diverse work streams in the construction and engineering sector,” explained Ong.

Beyond the realm of infrastructure, STEM can be channelled towards a company’s social programmes. Gamuda runs various targeted STEM-related, education and training programmes that benefit diverse groups. At the Gamuda AI Academy, Malaysians can learn full-stack artificial intelligence (AI) and build the skills for tomorrow’s tech jobs. “Google Cloud selected a construction company to be their AI partner,” said Chin.

As the engineering field thrives on creativity and problem-solving, diverse perspectives and experiences from around the world can drive ground-breaking solutions.

The Group’s Diversity, Equity and Inclusivity (DEI) culture promotes the participation of women at all career levels through the support of the Gamuda Women Empowerment Network (GWEN). To ensure age diversity, we place high potential young talents in senior management roles. Gamuda’s regional strategy prioritises local hiring (including Aboriginal and Torres Strait Islander groups in Australia) and spending on local supply chains. Meanwhile, our Enabling Academy is an employment advancement initiative that coaches and places neurodivergent young adults in professional jobs.

Be it operations, projects, or ESG programmes, our efforts have a multiplier socio-economic impact that cascades across people and planet.